OLADE: Latin America, Caribbean has 2.5 GW of energy storage
Source： ess-news
The 'Victor Jara' phase of the Oasis de Atacama complex, in Chile. | Image: Grenergy
OLADE’s technical note 10, entitled “Energy Storage in Latin America and the Caribbean – Current Status, Challenges and Strategic Recommendations” reports 2.5 GW of installed capacity in the region.
Energy storage installations are being driven by wider penetration of renewable energy and related grid limitations. Chile, Brazil, and Mexico are among countries leading the way for energy storage, the note said, with Central American and Caribbean nations installing smaller projects.
OLADE reported lithium-ion batteries account for around 60% of the region’s energy storage and are used in solar-plus-storage sites as well as standalone, grid-strengthening projects.
Pumped hydro energy storage (PHES), particularly in Argentina and Brazil, makes up most of the rest of the region’s facilities although Chile has some thermal energy storage capacity, as do smaller industrial electricity users across LatAm and the Caribbean.
Operational projects
As of June, Chile had 1,005 MW of installed storage capacity, according to the report, which highlighted Grenergy’s Oasis de Atacama project in the Atacama Desert. That site was launched in 2024 with 1.24 GWh of capacity planned last year of a total 11 GWh from lithium-ion batteries. In May, the 48 MW/264 MWh Capricornio BESS (battery energy storage system) PFV (photovoltaic) hybridization project began operation. As of May 30, five storage systems were reported as being in a testing phase in Chile, representing an eventual contribution of 571 MW of installed capacity and 2,378 MWh of energy storage capacity.
Citing a study by Greener, OLADE said Brazil had accumulated 685 MWh of energy storage capacity last year, with 70% serving off-grid systems. Some 269 MWh of storage capacity were added in 2024, for a 29% year-on-year increase.
Argentina has 17.5 MW of battery storage and 974 MW of pumped hydro, reported OLADE. Mexico has 192 MW of lithium-ion batteries with additional projects planned to support the grid and integrate renewables.
Other countries which have made notable progress include Honduras, which awarded a 75 MW/300 MWh project in March, and Peru, which reports 26.5 MW of storage in operation.
Under construction
Chile and Brazil lead for under-construction large-scale BESS and PHES while countries including Costa Rica, El Salvador, and Colombia are developing grid backup facilities and microgrids in isolated and rural areas. OLADE does not anticipate significant deployment of technology such as gravitational energy storage or flywheels this year.
Trends
Despite the differing characteristics of Latin American and Caribbean countries, OLADE observed most regional governments are including energy storage in their energy plans, climate policy, and electrification strategies, even if supporting regulatory frameworks are not yet in place. The commonest projects are in rural areas, on islands, and in areas with weak grid electricity provision, usually with help from international development finance.
Multilateral organizations including the Inter-American Development Bank, the World Bank, and the Development Bank of Latin America have also provided finance, technical assistance, and institutional support for energy storage projects.
Challenges
OLADE said a lack of regulatory support for energy storage often means no definition is available for the technology in electricity systems, leading to ambiguity about its role. As a result, storage often does not receive payments which adequately recognize the grid-strengthening role it can play by providing frequency regulation, backup power, or demand shifting.
Traditional electricity tariffs – defined for large, centralized power plants – do not adequately consider the value of distributed energy storage systems. The ability of regulatory bodies to update tariffs can be limited by a lack of in-house institutional and technical capacity. Under-representation of energy storage in grid expansion plans – and regulatory uncertainty – create investor risk, making project finance more difficult to secure.
Recommendations
OLADE has called for clear energy storage policy and regulation in the region, including a definition of whether projects generate or consume electricity, provide grid ancillary services, or should fall into a legal definition of their own.
Remuneration should reflect the grid-strengthening services offered by energy storage and market participation should be promoted on a level playing field with other energy technology. OLADE said storage should be included in energy planning policy, grid connections should be made available, multiple uses of storage should be enabled, and technical and safety standards should be drawn up.
Incentives including tax exemptions and credits, and investment tax deductions, should be made available, according to OLADE, and subsidies should be offered specifically for pilot projects and sites in areas with poor electricity provision. Public money should be used to develop second-life battery use and thermal and hydrogen-based energy storage, and to design energy storage programs for vulnerable regions.
Preferential finance, such as green credit lines, partial guarantees, and international climate funding – as well as the inclusion of energy storage in leasing and energy service contracts – can also reduce investor risk, according to the report.
Other energy storage policy recommendations made by OLADE included reserve capacity payments, auctions for renewables-plus-storage sites, and dynamic tariffs or net billing to encourage residential and commercial energy storage systems.